The Share Centre - Company overview

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Our View

Please note that we do not currently have a view on this stock as we generally follow the FTSE 100 constituents and a small number of companies outside this listing. The following is an overview of the relevant sector.

Sector: General Financial Services

Companies in this sector provide a wide range of often specialized financial services. The focus amongst the leading groups is on fund management, stock broking and trading. Leading names include; Schroders, Hargreaves Lansdown, London Stock Exchange and 3i.

The nature of the businesses can in some cases be a little difficult to understand. However the majority of the UK population will have some exposure either directly or indirectly to areas that these companies are involved in, most obviously via management of pensions.

Being directly involved in economic matters it will not come as a surprise that companies reflect the economic mood and as a result can often underperform in falling markets, while bull markets lead to rewards that do not go unnoticed by people in the real world.

There is rarely a happy medium for companies as economic cycles dictate bullish or bearish outlooks.

This means that the sector can be volatile, increasingly so in recent times. Although overall we would class it as medium risk, there is always the potential for that to change to higher.

Current risks, as already alluded to include exposure to financial markets, new rules and regulations and competition.

Last reviewed January 2018

Author: Graham Spooner, Investment Research Analyst

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